Embedded systems refer to, application-specific combination of electronic hardware and software for meeting the specific demand(s) of the system in which they are embedded.

Embedded systems refer to, application-specific combination of electronic hardware and software for meeting the specific demand(s) of the system in which they are embedded. Surge in the demand for smart electricity meters in mainly the developing countries of Asia Pacific and South America had driven the embedded system market in the recent years.

The rising demand for smart meters is also expected to continue over the coming years, attributed to the government initiatives towards energy efficiency and electrification in the rural areas of developing countries, such as India and China. Moreover, some of the further factors, such as technological advancement coupled with falling prices of inputs materials, like microcontroller and microprocessor units have also created a positive impact on the growth of the embedded system market in the recent years.

Based on the different products, the global embedded system market can be broadly classified as embedded hardware, and embedded software. Based on the different applications of the embedded system the global embedded system market can be segmented as automotive, consumer electronics, healthcare, telecommunication, industrial, homeland security and military, and aerospace.

Automotive was the largest market, among all the application segment of the embedded system market in 2014. The market dominance of the automotive applications is expected to sustain during the forecast period. The various applications of embedded system in the automotive sector are used for engine control, safety and security, infotainment, and others. The growth of this application in passenger cars of even lower priced variants is expected to boost the embedded systems market during the forecast period. Moreover, the rise in demand of Hybrid Electric Vehicles (HEV) and Electric Vehicles (EV) is also a considerable growth factor for the embedded system market in automotive application.

North America dominated the embedded system market in 2014. North America is also expected to continue with its market dominance in the embedded system market over the next five years. The Asia Pacific market is expected to be the fastest growing market over the forecast period. The high growth of the Asia Pacific market is attributed to emergence of automotive industry in the developing countries, such as India and China. Taiwan and China are some of the leading players of the embedded system market in this region.